...Chapter 4: Problem 6, Advanced Analysis, on page 91. Questions: Currently, at a price of $1 each, 100 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $1 TO $2 is unit- elastic (Es = 1.0). So how many popsicles will be sold each day in the short run if the prices rises ro $2 each? In the long run, a price increase from $1 to $2 has an elasticity of supply of 1.50. So how many popsicles will be sold per day in the long run if the price rises to $2 each? Answer: To answer this question we need to use the midpoint formula. Assume we have the two ordered pairs (Q1,P1) and (Q2,P2). We can then solve this equation to determine the quantity sold as a result of a price increase. For the short run we have the following information. with the ordered pairs of (100,1) and (Q2,2). Here we need to solve for Q2. Substituting the values into the above formula, we have: (Q2- 100) (Q2-100) (Q2+100)/2) Q2+100)/2) Es= 1= __________=___________ (2-1) (1) (2+1)/2) (1.5) This implies (Q2- 100) = (1) (Q2+100)/2) (1.5) ------ Q2-100 = (2) (Q2) + 50) (3) (2) Solving for Q2 we have the following: Q2-100= Q2 + 100 ------ 2 Q2= 400 ------- Q2= 3 400 = 200 3 3 3 3 2 3 We can do the same exercise for the long run. Here we have the following information. Es = 1.5 With the ordered pairs of (100,1) and (Q2,2). Here we need to solve for Q2...
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...refers to either the lack of enough water or lack of access to safe water. The shortage of water is turning out to be more pressing than prediction. This essay will identify some major causes of water scarcity and specifically focus on the solutions of enhancing water stewardship and protecting wetlands. The first major cause of water scarcity is overpopulation. The rapid growth of population has led to a massive demand of water. In the last 50 years, the human population has increased more than double. Moreover, accompanying with population growth are economic development and industrialization. Population growth also results in the need of food, home and clothing, which has added more pressure on the availability of freshwater while water supplies are limited and insufficiently managed. If the consumption rate of water has continued at unsustainable levels, by 2025, two-third of the world population may face water shortage, and ecosystem around the world will suffer even more. Water pollution is the second major cause of water scarcity. It is the result of many reasons, including pesticides and fertilizers that wash away from farms, untreated household waste and effluent. Even ground water can be polluted because pollution can leach into underground aquifers. Furthermore, harmful bacteria and pollutants may contaminate the freshwater sources and lead to numerous negative effects to health. Water which is wasted, polluted and unsustainably managed has already affected every...
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...Case study 1.1 What did that really cost you? Economists measure costs using a concept called opportunity cost. The opportunity cost of an action is the resources used when that action is taken valued in their next best alternative use. It is the problem of scarcity that explains why economists think opportunity cost is the appropriate measure of cost. Scarcity of resources implies that the real cost of an action to society is the resources that are used when that action is taken. Therefore, to properly account for the costs of the action, all resources that are used need to be incorporated into the measure of cost. The monetary price you pay for a product is an important part of its opportunity cost. But since time is a resource, the costs of time used in shopping for and consuming a product are also part of its opportunity cost. Examples are when we need to take time to compare potential suppliers to find the best price for a product, when we need to spend time queuing to buy a product, or when it takes time to consume or use a product. Question: Sally Stockbroker has to decide whether to return to university to study for a Masters of Business Association (MBA). The MBA will take three years to complete. Sally knows that the information relevant to calculating opportunity cost is that: (a) MBA fees will cost $20000 per year; (b) her salary as a stockbroker in every future year of her working life would be $80000 per year if Sally does not do an MBA; (c) during her time...
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...Causes of Euro debt crisis 1. Profligacy of the European Government & Unsustainable Fiscal Policy Countries including Greece, Portugal, Ireland, Spain and Italy in Europe are now paying a heavy price on their profligate way of spending, as reflected by the Euro debt crisis starting from late 2009. Fiscal policy is the use of government expenses and taxation income so as to influence the economy, while the average fiscal deficits had grown from 0.6% in 2007 to 7% at the beginning of the debt crisis across the Europe (Économistes Atterrés, 2010). Therefore, more and more debts were being issued by the above governments so as to support their national expenses, leading to an excessive rise in government debt levels. For instance, the average government debts per GDP had raised from 66% to 84% in the same period (Krugman, 2012).Basically, government debt is the money owed by the central government to the debt holders. As a result, with a high level of the debt-to-GDP ratio may imply that the country is less likely to repay the debt holders but higher chance to default on its debt obligations. Greece, contributing about 3.3% of the annual GDP towards the European Union (Central Intelligence Agency, 2012), with a 165.3 % of debt-to GDP ratio in 2011, was responsible for the outbreak of the Euro debt crisis. Historically, Greece Government’s Debt to GDP ratio was already at a relatively high level across Europe (McAuley, 2011)(Graph 1). Following by the adoption of the...
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...Business, Government Society Models Interactions among business, government, and society are infinite and their meaning is open to interpretation. Faced with this complexity, many people use simple mental models to impose order and meaning on what they observe. These models are like prisms, each having a different refractive quality, each giving the holder a different view of the world. Depending on the model (or prism) used, a person will think differently about the scope of business power in society, criteria for managerial decisions, the extent of corporate responsibility, the ethical duties of managers, and the need for regulation. The following four models are basic alternatives for seeing the BGS relationship. As abstractions they oversimplify reality and magnify central issues. Each model can be both descriptive and prescriptive; that is, it can be both an explanation of how the BGS relationship does work and, in addition, an ideal about how it should work. The Market Capitalism Model The market capitalism model, shown in Figure 1.2, depicts business as operating within a market environment, responding primarily to powerful economic forces. There, it is substantially sheltered from direct impact by social and political forces. The market acts as a buffer between business and nonmarket forces. To appreciate this model, it is important to understand the history and nature of markets and the classic explanation of how they work. Markets are as old as humanity, but...
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...Assessment #1: Economics and Ethical Issues “Markets bring together buyers (“demanders”) and sellers (“suppliers”)…” (McConnell-Brue, p. 43) In order to predict the economic issues associated with supply, demand, and equilibrium price of a particular product, I will need to explain the relationship between these components. Supply is the number of goods and services that businesses are willing to sell at different prices at a specific time, and demand is the number of goods and services that consumers are willing to buy at different prices at a specific time. (Ferrell, p.13) Supply and demand will meet at a certain point where the sellers are willing to sell products and services at a certain price and consumers are willing to buy at a certain price, this point is called the equilibrium price. The equilibrium price will also help to determine the equilibrium quantity, the price and the amount of product and services demanded and supplied at the equilibrium price in a competitive market. At this amount of equality, there is neither a shortage nor a surplus of product and services. The supply and demand of the products Tylenol, Aleve, and Advil depends basically on the consumer’s preference and taste. First, let me state that all of these products serve the same purpose, to relieve headaches and pain. What makes the difference is the characteristic of each product which is the active ingredient. “Tylenol and certain generic brands rely on acetaminophen. The active ingredient...
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...gold or silver to for dollar bills. Federal Reserve currency is legal tender in the US, which means that the federal government requires that it be accepted in payment of debts and requires hat cash or checks denominated in dollar bills be use dint he payment of taxes. 4.1 The reason Congress set up a Federal Reserve System in 1913 is because those who deposited money into their accounts weren’t able to get their money back due to the fact that banks loan less than 100 percent of deposits and then loans the rest of the money to someone else. They set this up in order for the nation to have a safer, more flexible, and more stable monetary and financial system 4.2 In order for the Feds to control the money supply, the Feds use these policy tools to control the money supply (1) open the market operations (2) discount policy and (3) reserve requirements. The most important tool is checking account deposits. 4.3 The reason why an open market purchase of Treasury securities by the Federal Reserve increases bank reserves is because when the sellers of the treasury deposit the funds in their bank, the reserves of the banks rise. The reason why an open market sale of treasury securities by the Federal Reserve decreases bank reserves is because the FOMC directs the trading desk to sell treasury securities, causing the reserves of the bank to fall. 4.4 The shadow banking system is non financial institutions that borrow money in the short term and take that money to invest in long-term...
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...will include the law of demand and determinants of demand; law of supply and determinants of supply. It will also include examples to better present the topic of surplus and shortage. The market of a certain product is in equilibrium when the amount offered of that product aligns with the amount needed. When demand is higher than what is being offered, businesses increase the offered quantities of their product as well the prices resulting in a decrease on demand. When the offer is higher than demand, businesses promote clearance to reduce inventory. Both scenarios show how companies tend to equilibrate price and quantities in the market. Competition among buyers and among sellers drives the price to the equilibrium price; once there, it remains unless it is subsequently disturbed by changes in demand or supply (McConnell, 2009). The law of demand implies that consumers will buy more of a product at a low price than at a high price. So, other things equal, the relationship between price and quantity demanded is negative or inverse and is graphed as a down-sloping curve. Some determinants of demand include: consumer tastes, the number of buyers in the market, consumer incomes, the prices of related goods, and consumer expectations. The determinants can shift the market demand curve. A shift to the right is an increase in demand. Likewise, a shift to the left is a decrease in demand. The law of supply states that as price rises, the quantity supplied rises; as price...
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...SUMMER TRAINING PROJECT REPORT ON “CUSTOMER SATISFACTION OF WATER PURIFIER” (AQUAGUARD) EUREKA FORBES PVT. LTD. SUBMITTED FOR THE PARTIAL FULFILLMENT OF THE REQUIREMENTFOR THE AWARD OF Masters Of Business Administration SUBMITTED BY: UJJAVAL K. JAIN UNDER THE GUIDANCE OF: Ms. Anjali Kedawat AMITY UNIVERSITY, RAJASTHAN Acknowledgement I would like to take the opportunity to express my deep gratitude to all those who have been the part of this report in some way or the other. First and foremost, I would like to thank my company guide Mr. Tapan Khurana ( Regional head, Marketing), for his valuable guidance, and for allowing me to work on the topic that developed my marketing skills, for getting knowledge for my career growth. I am thankful to my faculty guide Ms. Anjali Kedawat for her encouragement and timely suggestions which helped me greatly during the course of this project. I am thankful to Mr. Ankur Chaturvedi (Area Head- HR) for allowing me to get summer training in the company for nourishing my career. I’m also thankful to Mr. Avijit Ghatak (DDSM) and all those people in the company for their suggestion and help during my training that helped me to complete this project. Last but not least: I would acknowledge my Family, Relatives and all those at my department and college, Amity Business School, Amity University Rajasthan who helped me make this project reality. Ujjaval K. Jain MBA (General) 3rd semester ...
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...1. What would happen if Brazil allowed the real to float freely in FX markets: a. Immediately If the government did not intervene to weaken the real to around R$2, I suspect the real would be much stronger. This would propel imports and also capital inflow into the country due to the high interest rates. Since the government wanted to make Brazil competitive for exports, a weak currency would dissuade companies from exporting since they would earn less in revenue for every $ exported. Further with a free currency and no capital controls, the ease of investing and removing capital would make the Brazilian stock market (which as it is, is very small) more susceptible to foreign capital. b. Medium term (1-2 years)? In the medium term, the movement in the real would dependent on several factors such as: global sentiments, status of the euro crisis, relative attractiveness of other market (such as Mexico, Africa, South East Asia) etc., However it would be ideal if the real was stable in the range of R$2 +/- 10% This would ensure stability in the economy and capital markets. A strong currency would encourage imports while a weak currency would discourage investments. Further a weak currency would also make the corporates in Brazil nervous as they will need to pay more reals for every $ of debt on their books. Would these be adverse developments for Brazil? Why? I think it is important to have stability in the currency before allowing it to float freely. Brasil is still...
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...Fed’s Fisher Says Too-Big-to-Fail Banks Should Be Shrunk Federal Reserve Bank of Dallas President Richard Fisher said the government should break up the biggest U.S. banks rather than allow them to hold a “too-big- to-fail” advantage over smaller firms. The 12 largest financial institutions hold almost 70 percent of the assets in the nation’s banking system and profit from an unfair implicit guarantee that the government would bail them out, Fisher said today in a speech at the Conservative Political Action Conference in National Harbor, Maryland. The biggest banks enjoy a “significant” subsidy, enabling them “to grow larger and riskier,” he said. “These institutions operate under a privileged status,” Fisher said. “They represent not only a threat to financial stability, but to fair and open competition.” The biggest banks came under scrutiny yesterday at a Senate hearing on JPMorgan Chase & Co. (JPM), which hid trading losses, according to a report by the Senate’s Permanent Subcommittee on Investigations. The New York-based firm under Chief Executive Officer Jamie Dimon lost more than $6.2 billion last year in a credit derivatives bet by Bruno Iksil, known as the London Whale. Fisher said in a phone interview with Bloomberg News that his proposal “will not lead to the denial of credit for U.S. corporations.” The cost from big banks “far exceeds the benefits,” and the U.S. doesn’t need “to have the largest banks in the world to compete,” Fisher said after his speech. ...
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...1 January 2011 1) Everyone’s Gasoline Problem Gasoline prices in Chicago have risen from $2.64 to $2.92 between September 2009 and September 2010(2) with a series of price changes in between. Prices change for a number of economic reasons. One such reason is supply and demand. Gas prices rise after 9/11 and after the start of the war with Iraq, it seems to rise when there is any major crises. Supply and demand plays a major part in the fluctuation of gasoline prices. The price of crude oil can and does influence the supply and price of gasoline. When the price of oil rises, the cost of supplying gasoline increases for petrol suppliers, reducing the quantity of crude oil demanded in gasoline production and potentially reducing the supply of gasoline. So its expected that a rise in the price of crude oil to lead to a rise in the price of gasoline. Even when crude oil prices are stable, gasoline prices can fluctuate because of reasons such as the season and local retail station competition. Additionally, gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages.(3) Crude oil prices are determined by worldwide supply and demand, with significant influence by the Organization of Petroleum Exporting Countries (OPEC). OPEC has tried to keep world oil prices at its target level by setting an upper production limit on its members.(3) also increase in demand for gasoline in the United...
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...building social amenities like pure drinking water, more women are becoming empowered and are learning to take care of their own finances. But is this sustainable? Should the developing nations of Africa continue to depend on organizations such as this indefinitely? The answer to all these unfortunately is no. Governments of wealthy nations are continually pumping money into the fair trade. NGO’s fight indignantly for the rights of poor farmers. Free trade is Although, fair trade has improved and continues to improve the lives of countless people in developing countries, we should be sure to note that fair trade is NOT free trade. Sooner or later fair trade should give way to the natural forces of competition and free market demand and supply that will inevitably improve the economies of LDC’s by increasing the efficiency...
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...Supply 1 Supply and Demand Simulation Erika M. Sample Eco 360 Patrick Deveraux 8-07-07 Supply 2 The concepts of supply and demand are fundamental to understanding many real-world occurrences. The demand curve is downward sloping, and that quantity demanded increases as the price decreases – that is, as you move down the demand curve. GoodLife could increase the quantity demanded of its rented apartments only by reducing the rental rate. The supply curve is upward sloping, and quantity supplied increases with an increase in price - that is, as you move up the supply curve. An increase in rental rate would cause GoodLife to lease out more apartments. Quantity demanded equals quantity supplied only at the equilibrium point. At prices below equilibrium, the quantity demanded exceeds quantity supplied, and there is a shortage in the market. That is, consumers are willing to buy more than producers are willing to sell at this price. This causes price to increase. As price increases, quantity demanded decreases and quantity supplied increases. This adjustment process continues until equilibrium is attained. Similarly, at prices above equilibrium, quantity supplied exceeds quantity demanded, and there is a surplus in the market. Producers are willing to sell more than consumers are willing to buy, which exerts...
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...ASSIGNMENT ON Date of Submission: 06.08.11 INTRODUCTION This report of Country Environmental Analysis (CEA) aims to assess ADB’s future role and operational strategy in the environment sector and will also provide input to the Country Strategy and Action Plan (CSP). This CEA for 2005-2009 outlines the environmental issues that are most significant to the Bangladesh’s economy. It will also provide background information on the environmental constraints, needs and opportunities in Bangladesh. Over the given period of this strategy document, ADB will be working with the Government of Bangladesh (Gob) for the improvement of the environment sector, wherein this report may be a basis for actions and/or intervention. This work focuses on the aspects of understanding the important features of the Bangladesh environment that need to be essentially understood. The purpose of the report is to present the findings of a review done on the environment sector. The review considered the ongoing and past interventions, legal and policy regimes and finally outlined the outstanding issues facing the sector. Objectives of the study It is well established that the process of land use change leads to the alteration of existing environmental conditions of any area. The specific objectives of the study were: 1. To identify the existing land use pattern of the selected area; 2. To explore the prime causes of land use change and its Effects...
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